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More people today are buying up and keeping - or at least contemplating keeping - their old homes. In fact, 65% of investors are renting their properties instead of flipping? Does this make sense for you? Here are some things to consider:

What are rents going for in your neighborhood? Your real estate agent will be happy to give you an estimate, or for a rough valuation, do a web search. This should be your first step because the agent can help you determine what kind of move-up properties are available and what the new mortgage payment would be. Comparing this with the offsetting rental income from the old house will help you decide if it’s worth it.

Does your income qualify you to carry both mortgages? Your lender will likely expect two years of history managing rental properties in order to allow you to use the rental income you would gain from your old home as part of your calculations. If your debt to income ratio is fine with or without the rental income, then keep reading. Not sure? Consult with a loan officer.

Would you like another relatively passive source of income? This question is kind of a duh. Who wouldn’t want additional sources of income that you could earn while you continue to do your day job? The beauty of rental income is you earn it whether you work or not. No matter what’s going on with your life, you still get paid. That’s pretty awesome.

What are the pros and cons? First, the positives:

• The rents received may cover some or all of the mortgage on the new property.
• Rental income makes you less needy of traditional employment income.
• You still have the home if you decide you want to keep it or pass it to a family member in the future.
• You can sell it at any time, so keeping and renting it is doesn’t have to be a forever decision.

But then there’s the downsides, right?

• You have to find a tenant and hope it’s a good one. And how long will they stay?
• You are responsible for the expenses during down times when the property is vacant.
• You have to be ready to drop everything when issues or emergencies come up. And when have you ever known a plumbing problem that’s not an emergency or doesn’t happen at an inconvenient time.
• The tenant probably isn’t going to treat your property with the same TLC as you.
• What if the tenant is a deadbeat or trouble? Do you know how to get them evicted, and do you have time to deal with it?

But, wait, those aren’t really downsides. Here’s why:

Even if you only own one rental property, it is wise to hire a property manager. Property management companies are licensed and certified, and they can handle every issue with the property for a very nominal fee - usually 10% of the monthly lease for one single family residence. The rate gets lower with each additional property under management. Unless you have a lot of extra time and have the ability to run credit reports, screen tenants, show the property, and handle maintenance, disputes, and, God forbid, evictions, then it doesn’t pay to do it yourself.

So are you ready to become an investor and start supplementing your income? Are you ready to move into a bigger and better house? Well, you’ve got the makings for a win-win then. Speak with your real estate agent today and get a recommendation for a good property manager. Then start home shopping. There’s nothing better!

Across the country, aspiring property buyers are waiting for RERA – or the Real Estate Regulation Act – to be implemented by the States. Time and again, it has been stated that the consumer must consider the reputation of the builder prior to taking a decision to buy a property/asset which is likely to remain for generations.

On implementation of RERA, only builders with sound reputations will remain in the fray – this probably its most important function in protecting consumer rights and interests. Once RERA becomes a enforceable law, it will change the ways in which residential housing projects are planned, offered, sold and possessed across India. Property buyers will no longer need to worry about unfair contracts, delayed possessions, non-notified alterations in building plans and other risks.

The aim of RERA is to make real estate purchase simpler by bringing in better accountability and transparency. In doing so, it will also infuse a lot more confidence among buyers – who, at the end of the day, should feel as comfortable about investing in a home as they are about buying gold.

Registration of every real estate project with the appointed tribunal (with some exceptions). Non-registered projects cannot be offered for sale or booked by promoters.

Mandatory uploading of project details by the developer on the RERA website, including layout planning and completion schedule.

70% of the advance collected from buyers needs to be maintained in a separate bank account and be used only for the stipulated project construction. These funds cannot be hived off for other purposes – a practice that has contributed majorly to delayed projects in the past. The individual state governments have reserved the power to alter the amount, but the principle is very much in place.

Establishment of Real Estate Appellate Tribunals that will handle any issues related to property disputes, with the intention of delivering quick and unambiguous resolution.

Setting up of an advisory body to deal with matters related to government-sponsored real estate development.

In one of the most important addendums to RERA, real estate brokers and the way they conduct their business now also fall under its ambit. The days of unscrupulous property agents either acting solely in their own interest or in collusion with developers are now numbered.

In fact, RERA will protect both the buyer and the seller – for instance, it protects developers from non-payment. While the promoter is required to obtain necessary documentation such as the completion certificate, the buyer is liable to be fined for delays in payment. Failure to register the property or comply by other regulations of the Act will lead to hefty fines and even imprisonment in certain cases.

All this may sound too good to be true – and in fact, it is for now because RERA is likely to come into full force from May 2017. All the individual state governments need to get their ‘acts’ together to comply with its requirements and adopt it. The good news is that they do not have the option of not doing so – the Central Government has amply demonstrated that it is determined to push the Real Estate Regulation Bill through come hail or high water.

The Indian real estate market is currently showing positive signs of revival. Even as smaller builders struggle – now also because of the recent demonetization of larger currency notes – credible developers continue to launch new projects and raise funds to meet the committed completion timelines. With RERA in place, several not-so-credible developers will go out of business. Buyer will be protected from players with ulterior motives – in short, fly-by-night operators. This will, in turn, infuse a much-needed positive sentiment among buyers and consequently help increase demand. Increased sales will improve the cash situations of the credible developers that remain after the weeding out, and projects will be automatically delivered in time.

Should You Wait For RERA Or Buy Now?

At the current point in time, because of the lower demand seen over the last 2-3 years, property prices across India’s major cities have sunk to incredibly low levels. Buyers have a wide range of options in locations, budgets, amenities and – perhaps most importantly – in developers. In previous times, buyers with budget constraints could only consider projects by builders with doubtful reputations and questionable business practices. This is no longer the case – today, a home in a quality project by a trustworthy and reputable developer is very much an option even within a modest budget.

RERA will take another year to be implemented; meanwhile, there are other dynamics which are changing on the Indian property market. Reduced pricing coupled with attractive deals in most cities, and the fact that more and more fence-sitting buyers have run out of patience and are coming onto the market with firm ‘buy’ decisions, have kick-started the modest but very real recovery we are seeing on the residential market. In Pune, we have witnessed a 25% increase in buying activity in high-demand areas like Undri-Pisoli, Ambegaon, Bhugaon and Wagholi in the last 4-5 months alone. In Mumbai, buying activity in Navi Mumbai, Thane and some other relatively affordable areas has also picked up significantly.

What does this mean for property buyers? Very simply – any revival in buying activity eventually leads to increased prices. Such is the immutable law of demand and supply. Given that demand is increasing steadily even now, property prices will begin rising even before RERA becomes a market reality next year.

What Experts Say

Industry watchdogs unanimously agree that there is no scope for current property prices to decrease further. Whatever correction in prices could happen has happened, and developers cannot reduce prices further even if they wanted to – doing so would, in many cases, seriously impact their ability to stay on the market. In fact, RERA will mean that promoters will be bound by more procedures, and this may increase the cost of their projects – costs which are likely to be passed on to the consumer. In other words, RERA could be instrumental in inducing cost escalations in many cities.

It should be noted that while RERA will ensure that unscrupulous developers and their business practices will be driven off the market, it will simultaneously ensure that builders with sound reputations and impeccable track records will become stronger. One of the most important intentions of the new law is to support such developers so that they can continue to serve the needs of property buyers in the wholesome and transparent manner which they are known for.

In short, for buyers who have no intention of dealing with any but the most reputed developers, there is no real advantage in waiting for RERA to kick in. If one is working with a reputed developer, the privileges, benefits and safeguards that it will bring already apply today.

Another valid argument against waiting for RERA before buying a property is that that once the Act is in place, it will become mandatory for builders to invest extra time with regulatory bodies to work along the extensive details of construction plans, clearances, approvals and other details related to their new projects. Paradoxically, this will in fact result in delayed deliveries where the opposite effect was actually intended.

Even though many buyers feel that they should wait for RERA to be implemented before buying a flat, the fact remains that there are already many builders with strong reputations and credible market practices. Buying a property from such a player now instead of later can turn out to be wise decision if RERA results in upward pressure on prices. Also, if one is looking to make the most of current attractive pricing and offers, there is actually no better time than now. The time and effort spent in taking advantage of the favorable market dynamics existing today will prove to be the soundest investment. The sole proviso is that one should only patronize a reputed developer with a good track record for delivery and construction quality.

In India’s highly dynamic market environment, change and innovation have become essential for the survival of any business. The housing sector, which was in the previous years defined by a remarkable lack of change, has been no exception. The winds of change are causing aspects of this industry that previously seemed ‘cast in concrete’ to give way. Let us examine five factors that stand out in this respect:1) Increasing focus on affordable ticket sizes

Across most Indian cities, the financial ‘sweet spot’ for homebuyers is seen to be in the range of INR 50-70 lakh. In hyper-expensive Mumbai, ticket sizes of around INR 1 crore are popular with buyers because of the higher wealth creation and therefore purchasing power there. However, as of 3Q16, there has been a rise in apartments priced under INR 1 crore in Mumbai, as well.

The proportion of increase in units launched in Mumbai in the under INR 1 crore ticket size increased more than the proportion of the overall rise in unit launches. Mumbai serves as a good example to illustrate the rising affordability trend because it is the toughest market in the country, and yet could see more launches in this segment. Other cities will, therefore, fare even better than Mumbai in terms of decreasing housing ticket sizes.

To keep the price tags of their offerings attractive, developers have been reducing the average carpet area of apartments across cities. For example, the average apartment sizes in Mumbai and Bengaluru have, in recent years, shrunk by 12% and 30% respectively.2) Configurations revolution

When it comes to the most preferred configurations, 1 BHK flats remain the most popular in Mumbai, while 2 BHKs rule in most other cities such as Delhi-NCR, Bengaluru, Pune, Hyderabad, etc. Of course, affordability is the main reason behind the popularity of smaller flats in Mumbai. Most of these smaller configurations are priced around INR 1 crore, which is considered ‘affordable’ by Mumbai standards.

Moreover, selling these units later on is easier than selling bigger configurations, as there are always more people looking to buy 1 BHK flats in Mumbai than there are units available. In other cities, the same logic applies to the 2 BHK configuration. As real estate in most cities is cheaper than Mumbai’s, homebuyers can afford to and do buy bigger configurations.3) More developers entering affordable segment, PE players willing partners

The Modi Government’s focus on affordable housing has helped in making this segment more palatable to developers. The erstwhile aversion to being tagged as ‘low-income housing builder’ has waned, and even larger players are openly entering this market segment. There is now considerable political and social goodwill attached to such a move, apart from its undoubted business sense. Players like Mahindra Lifespace, Tata Housing, Shapoorji Pallonji Group, Assetz Property Group, Puravankara Projects, etc. are all enthusiastic about entering or expanding their affordable housing portfolios this year.

Some more like Emgee Group plan to enter this segment and invest INR 1,600 crore over the next five years. Private equity players are willing to partner with developers operating in this space and fund such projects. Nisus Finance Services, Brick Eagle Capital, Avenue Venture Partners Real Estate, Carlyle, Essel Finance Advisors and Managers LLP, Provident Housing and International Finance Corp are some PE firms helping developers with their affordable housing projects across the country.

India’s chronic dearth of affordable projects is nothing short of legendary. However, with slowing sales in the luxury and premium categories, affordable housing is now the one segment which shows any kind of real promise to open up revenue for developers. After the recent demonetization move, land prices will plummet – more so in the tier-II, III cities and the fringe areas of metros. This, too, will aid the cause of making homes more affordable in India. While developers are already constructing smaller-sized units on the outskirts of cities, the Government must step in by improving the connectivity of these outskirts to respective city centers.4)Basic amenities on the rise irrespective of project size

Homebuyers expect decent amenities in their housing projects, regardless of whether they are townships or standalone buildings. While townships offer many amenities, sufficient parking, a small garden and play area, good security and power backup are now increasingly being seen even in standalone residential buildings. Buyers are no longer willing to settle for amenities-starved projects and expect the basic facilities even if their purchasing power is on the lower side. With more and more developers of modest-sized residential projects heeding to this demand, the rest have been left with no choice but to follow suit.5) Engaging on social media and increasing spends on digital marketing

Dissatisfied homebuyers have been using social media effectively to demand redressal to their grievances. Developers have realized the power of social media in brand image management, and many have started responding to buyers’ posts or queries in real time. At the same time, they have realized the potential of targeting possible buyers with advertisements while they are online. In fact, most developers have begun to realize that investing in digital marketing is necessary in a market environment where more and more buyers review all their options online before actually doing site visits at shortlisted projects and making their final decisions.- by Anuj Puri (Chairman & Country Head, JLL)Source : JLL India

Government of Maharashtra have notified new Transfer of Development Rights (TDR) policy for Mumbai wide circular TPS-1813/3067/CR-122/MCORP/12/UD-13 dated 16/11/2016.

The high lights of the policy, simplified for our readers, are:

- Cases eligible for TDR :

(i) Reservations for public Purposes, new roads, road widening etc.

(ii) Land under any deemed reservations.

(iii) Land under any new road or road widening

(iv) Development or construction of the amenity on the reserved land.

(v) Heritage Structures.

(vi) Slum Housing

(vii) As may be notified by the government.

- Cases not eligible for TDR

(i) For land acquisition where compensation already paid.

(ii) Award of Land.

(iii) Layout already sanctioned with DP roads.

(iv) TDR not permission for width of the road.

(v) FSi relaxation already granted to owner

(vi) Where lawful possession including by mutual agreement or contract has been taken.

(vii) Required compulsory open spaces

(viii) Any zone which is not subjected to acquisition

- Generation of TDR :

(i) For surrender of land which is free from all incumbrances

- 2.5 times of land surrendered in Mumbai City

- 2 times of land surrendered in suburbs and extended suburbs

- Additional TDR of 20%, 15%, 10% and 5% to owner surrendering with in 1, 2,3 and 5 years of this notifications

(ii) DRC will be issued only after surrendering land with leveling and 1.5 meter boundary wall.

(iii) Lease plot subjected to lease agreement and rent.

(iv) Amenity TDR = Cost of construction / Cost of Land as per Ready Reckoner multiplied by 1.25

- Utilization of TDR:

(i) Holder of DRC should submit utilisation documents

(ii) Commissioner should write on DRC proposed utilisation of DRC

(iii) There is no restriction as to north bound etc for receiving. A TDR generated from north or suburbs can be utilised in South Mumbai.

(iv) TDR calculation formula : X= (Rg/Rr) x Y

X= Permissible Utilisation of TDR / DR in Sqm on receiving plot

Rg= Rate of land in Rs per sq mtr as per ASR

Rr= Rate of land in Rs per sq , as per ASR

Y= TDR debited from DRC in sq m

(v) Utilisation as per Road width :

Plot Fronting Road Width

Maximum Permissible TDR

TDR in ISLAND

TDR in Suburbs

Less than 9 m

Nil

Nil

9 m to 12.2 m

0.17

0.5

12.2 m to 18.3 m

0.37

0.7

18.3 m to 30 m

0.57

0.9

30 m & above

0.67

1

BMC will convert all roads above 9 m as per site condition.

(vi) FSI loading limit shall be the basic FSI+TDR+Additional FSI on payment of premium if any + Road Widening FSI of the very said plot.

(vii) The utilisation of TDR should be minimum 20% slum TDR.

(viii) If plot is touching dead end within 50 mtrs from main road then it will be deemed to be touching main road.

(ix) The maximum restriction is not applicable to SRA, MHADA, Redevelopment, etc.

- Areas where no TDR can be used:

(i) Between the tracks of Western Railway and S V Road

(ii) Between Western Railways to Western Highway

(iii) Betwwen Central Railway Main line to L B S Marg

(iv) On plots falling within 50 m on roads on which no new shops are permitted as specified

(v) CRZ and No Development Zones, Tourism Development Zones, MHADA, MMRDA and MIDC jurisdiction

(vi) SRA schemes

(vii) Areas where permissible FSI is less than 1.00

(viii) Restricted areas under CRZ, Defense, etc

- Infrastructure Improvement Charges:

The utiliser shall pay to the Planning Authority, an infrastructure improvement charges, for a proposed quantum of TDR to be utilised, at the rate of 5% of construction cost.

- Effect of this Regulation:

Generation of TDR from these regulations shall not be applicable where DRC has been prior to publication of these regulations. Within one year, old DRC of TDR shall be allowed to be utilised as per TDR zones of old regulations without indexation.

Coming up next: KYC for Property Owners

Know Your Client (KYC) is usual norm for all bank account holder, Dmat Account holders and all credit or debit cards in the country. Any defunct account needs to be deleted with one year of last transactions. Any bank locker which is not opened during any financial year are been sealed by banker.

On the same norm, Benami Property Transactions is the next big agenda of the government. To catch black money which is been converted into real estate property, government is all set to bring in rules and regulations to curb the black money transactions in property transactions.

KYC will give identification to property owners. All owners of the properties will be requiring to identify themselves. Benami Properties will be identified and confiscated by the government if not identified and renewed periodically.Source : The Accommodation Times

The most important advantage of a ready flat is, of course, that the buyer can move in immediately, end the rental outgo and pay the loan instalments instead

In the current market scenario, apartments that are ready for possession are seeing the highest demand from buyers. This trend is based on two thought processes. One, the sooner one can move into a purchased property, the sooner the monthly rental outgo stops. Two, there is decidedly low confidence for under-construction projects at the moment because many developers have inordinately delayed their projects. Though the residential market has seen quite a bit of revival, buyers are still wary of investing in projects that will be under construction for anything longer than 4-6 months before the handover of completed flats.

The highest demand currently exists for ready-possession, 1- and 2-bedroom-hall-kitchen (BHK) flats.

For and against ready houses

The most important advantage of a ready flat is, of course, that the buyer can move in immediately, end the rental outgo and pay the loan instalments instead. If the flat is purchased for investment, it can be rented right away. Either way, it becomes possible to plan one’s finances in real time and make long-term plans.

The disadvantages, however, include the fact that making structural changes to the house can be a lengthy process as it would need approval by the housing society and the municipal authorities.

Under-construction properties

The big advantage of investing in an under-construction property is that it will invariably be cheaper than a property that is ready for possession. Depending on the stage of construction and the response that the project elicits from other buyers or investors, the rates in a yet-to-be-delivered property can be between 15% and 30% lower.

Also, the value of under-construction projects often appreciates as the completion date draws near. This is because the market would then see lesser risks in the project. This is why they are usually willing to pay a higher cost. At this stage, buyers can request certain structural changes from the developer, who will be happy to oblige if the requests are reasonable and do not compromise the structural integrity of the building.

Obviously, the main disadvantage of an under-construction flat is that it cannot be occupied or rented out immediately. Also, the funds invested in it are locked into a non-performing asset. And as already mentioned, there may be a delay in delivery, or the developer may even default. Such eventualities obviously has serious financial implications for the buyers.

Due diligence for ready properties

Get all details pertaining to the developer’s credibility. Of particular importance is the developer’s delivery track record of past projects.

Many factors directly affect the levels of risk, but they are never revealed to buyers. A lot of this information can be acquired at the local level, preferably from someone who has been residing in the area for a long time.

Ask the developer for the approved plans of the project, a copy of the IOD (intimation of disapproval), completion certificate and a clear land title. Ensure that the property is free of litigation and any kind of associated debt. Also, establish the existence of a proper society.

If one is buying a second-hand property, proper transfer and re-registration should be done before handover. The documents required for registration of a residential flat, apart from the sale deed, include a letter from the society mentioning the number of floors in the building, the year when the building was built, the apartment’s built-up area and number of lifts in the building.

Other things a buyer should check for include: the approved usage of the property, notices of any pending or threatened litigation or governmental action relating to the real estate or property seller, any applicable condominium documents, service contracts, all construction-related documents, including warranties, and as-built plans and specifications.

Assess the under-construction house

Get an reasonable idea of the project’s progress, especially if the property is being bought directly from the developer. When no property adviser is involved in the transaction, the risk of falling prey to a deceptive projection multiplies manifold.

Establish that the builder has free and clear ownership of the land on which the project is being built. An agreement between the builder and the original owner of the land is not sufficient. The project also needs to have an IOD: a set of instructions that a developer needs to comply with, to legally construct the project. The IOD is valid for 1 year and needs to be reissued if the project has not been completed in that time. Also ask for a commencement certificate.

While considering such options, it is also necessary to establish the trustworthiness of the builder, especially in terms of track record for transparent dealings and compliance with legal formalities.

Reclaimed from marshland and reserved for planned commercial development, Bandra Kurla Complex (BKC) was initially created by Mumbai Metropolitan Region Development Authority (MMRDA) as an alternate CBD to Mumbai. Its express purpose was to halt the further growth of offices and commercial activities in South Mumbai.

Commercial rentals at BKC are now the highest in the city; companies that want larger spaces are turning to BKC. Of late, this micro-location has also been attracting the highest grade of residential property developments, and current under-construction supply is very limited.

Residential values in BKC range between Rs 40,000-55,000/sq ft and in the immediate neighbourhood of Bandra East, they range from Rs 25,000-35,000/sq ft. Some of the projects that have been garnering interest from homebuyers include Kanakia Paris, Serendipity, Sunteck Signature Island, Sunteck Signia Isles and Shree Naman Residences. Developers in this region are now focusing more on providing affordable luxury to make sure that their offerings meet the actual demand. Despite the high price points, the demand for such residential properties in BKC has seen a considerable increase over the last three to four years. Year-on-year appreciation of residential capital values in this area has been between 10 to 12 per cent over the last couple of years in spite of the overall sluggish residential market in Mumbai.

Bandra has certainly emerged as the new hotspot for the city's niche. Proximity to high-end educational institutions, hospitals, shopping malls and plenty of open spaces in the micro-location has worked well in driving demand for homes in and around Bandra. Moreover, the seamless connectivity that this location offers is yet another reason for the increased demand for homes in this location.

The infrastructure flexibility is an added advantage for the emergence of this location as the next big hotspot. Infrastructural developments such as Bandra-Worli Sea Link have improved the connectivity with South Mumbai significantly. Also, Santa Cruz-Chembur Link Road has enhanced the South-West connectivity and reduced the commute time considerably. The presence of well-established social infrastructure with numerous avenues for entertainment makes this area content in every aspect.The fact that the Maharashtra state government is looking at making BKC the first smart city by putting in place the ecosystem required for an international finance centre on the lines of Singapore or London is welcome news for those looking to invest in this area. MMRDA, the governing body for BKC has already sent out a proposal to smart technology manufacturers for suggestions and quotations to make BKC the country's first smart city. MMRDA is attempting on bringing the entire 160 hectares of BKC under Wi-Fi and CCTV surveillance. Also, a smart parking concept will be implemented across all the 3,000 parking slots in BKC. The smart city customer app will allow the denizens to access online all the amenities and infrastructure within the smart city, for instance booking restaurants, to finding hospitals and even locating parking.- by Ramesh Nair
(The writer is COO - Business & International Director, JLL India)
Source :- Business Standard

The notified Real Estate Act curbs most malpractices that has been plaguing the sector for decades

Real estate companies may find it hard to claim relief under S4A

The Real Estate (Regulation and Development) Act, which protects the interest of home buyers has finally started seeing light of the day though slowly.
Keeping up with the deadline to operationalise it from November 1, the Central government has notified it for the five Union Territories - Andaman and Nicobar Islands, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep and Chandigarh. None of the states except Gujarat has met the deadline.Even though your state may not have implemented the Act; it will be similar to the one notified for the union territories and looking at the finer points covered can give you a sense of things to come.The rules apply to all on-going projects that have not received completion certificate. Here’s how the Act protect buyers’ interest:

No misuse of funds:

A common practice among developers was to raise money from buyers for one project but not use it to complete that one. They diverted the money would use the money to buy land which would enable them to launch another project and raise more money from a new set of buyers. This inevitably led to delays in delivery and hassles for buyers.
For buyers this lead to multitude of problems. They had to bear the burden of monthly instalment and rent simultaneously. They even lost the tax benefits on home loan if the project got delayed beyond three years.
The Act makes it mandatory for developers to keep 70 per cent of unused funds collected for a particular project in a separate bank account within three months of applying for registration of a project with the Real Estate Regulatory Authority. This will disallow him to use it for any other purpose than for construction of the particular project.No lopsided penalties: Developers usually keep lopsided penalties in the agreement. If there’s a delay from the developer’s side, they either don’t mention the penalty they will give to the flat buyer or keep it as low as one-two per cent a year. At the same time, the penalty levied on the buyer for delay of payment ranges between 18 per cent and 24 per cent. Even the national consumer court has taken cognisance of such disparity in penalties in the recent cases buyers have filed against developers in the National Capital Region.
Suppose a person purchased a 2-BHK flat of 1,100 sq ft for Rs 50 lakh. If he delayed payment, the interest would be as high as 18-24 per cent per year. At 18 per cent, this translated into Rs 75,000 per month. For developer, it works out to be mere Rs 4,166 – 8,333 a month.
The Act puts an end to such practices. It has standardised and defined the interest rate both parties would get in case of delays. It’s kept at two per cent above the State Bank of India’s Marginal Cost Lending Rate. At present it works out to be 11.05 per cent.

No false promises: It’s has been a common practice that developers show one sanctioned plan to the buyer. Buyers pay according to the plan shown to them. Later, the developer changes the plan. He may reduce the area, change certain amenities, change configuration, and so on. Many buyers ended with lower area than they paid for or found that the promised amenities are missing when the project is finally delivered. The developer usually blames the government agencies for the changes and gets away with it.
But now, the developer will need list the project with the real estate regulator providing details of the original sanctioned plan. He will need to report every time he makes any changes to the plan and also give a fresh deadline for completion of the project post the changes. He will also need to declare thee total amount collected from buyers and the actually money used. All this needs to be certified by an engineer, architect and practicing chartered accountant. With a public record, the buyers can easily take the developer to task and claim refund based on the changes made.
Even when registering the project with the regulator, the developer needs to submit authenticated copy of PAN Card, annual report comprising audited profit and loss account, balance sheet, cash flow statement and auditors report of the promoter for the immediate three preceding years, authenticated copy of legal title deed, copy of collaboration agreement if the promoter is not the owner of the plot. Promoter also has to declare information regarding the number of open and closed parking areas in the project.
A buyer can also visit the regulator’s website to get information relating to profile and track record of developer, details of litigations, advertisement and prospectus issued about the project, details of apartments, plots and garages, registered agents and consultants, development plan, financial details of the promoters, status of approvals and projects, etc.

Transparent project progress report: Buyers will no longer need to rely on the word of the developer on the progress of construction. Potential buyers can also look at progress of the project before buying a flat there. The Act requires developers to make a whole host of information public and report quarterly progress on the project. Within 15 days of a quarter ending, the developer will need to report information regarding number and type of apartments or plots, garages booked, status of the project with photographs floor-wise, status of construction of internal infrastructure and common areas with photos, status of approvals received and expected date of receipt, modifications in sanctioned plans and specifications approved by the competent authority.
Disputes resolution: If there’s a dispute, the buyer can make an appeal to the Real Estate Appellate Tribunal by paying a fees of Rs 5,000 and for every complaint made to the regulator the fee will be Rs 1,000.
The buyer and developer needs to comply with the order of the tribunal. If they fail to do so, the tribunal has the power to compound the penalty or even send the developer (or buyer) to jail. For a developer, the punishment for disobeying the order is 10 per cent of the project cost and for buyer it’s 10 per cent for the price paid to acquire the property.
The Act also covers agents, who need to be registered with the regulator and any misdeed done by them. The rules also prohibit any discrimination in sale of properties on any ground. Finally now, even in case of real estate, the consumer will be the king.

Key Highlights :-

70 per cent of unused amounts collected for ongoing projects to be kept in a separate bank account